Russia Report: November 5, 2001

NOTE TO READERS:
The next issue of the "RFE/RL Russian Political Weekly" will appear on 19 November.

KREMLIN AND THE WHITE HOUSE

PUTIN'S AGENDA FOR THE SUMMIT.
The Russian government has been careful not to link its cooperation with the U.S.-led campaign against international terrorism with any specific requests of the U.S., but various groups of Russian foreign policy experts are less reticent about voicing Russian expectations on the eve of the next U.S.-Russia summit.

As Russian President Vladimir Putin and his aides prepare for his trip to Crawford, Texas, next week, Moscow-based analysts are advising Putin to bring a long list of demands. They are also predicting that a failure to bring back some significant concessions from the U.S. might add to the Russian political elite's perception that Putin has set off down the path taken by former Foreign Minister Andrei Kozyrev of providing one concession after another without any corresponding measures from the U.S. (see also "RFE/RL Russian Political Weekly," 30 October 2001).

Two groups of experts gathered recently in Moscow, and despite the array of political views represented, the bottom line of both fora appeared to be the same: Russia should push for maximum gains at the Crawford summit.

The document prepared by the Foreign and Defense Policy Council carried the signatures of more than 100 Russian political luminaries, such as former Foreign Minister Yevgenii Primakov, former Russian Ambassador to the U.S. Vladimir Lukin, and State Duma International Affairs Committee Chair Dmitrii Rogozin, reflecting hours of debate at the Council, according to "Vremya MN" on 2 November. The authors of the report suggest that among the issues likely to be raised at the summit are the writing off of Soviet-era debts and restructuring of Russian debts and Russian membership in NATO, or at least the suspension of NATO expansion pending Russia's admission to the alliance. Council Chairman Sergei Karaganov argues that Russia should bring up the issue of its membership in NATO now so that the alliance can be "transformed into a universal organization of European and global security and be stripped of its destabilizing features."

A second discussion of Russian foreign policy objectives took place at Moscow's Aleksandr House on 25 October. Participants included unofficial Kremlin advisor Gleb Pavlovskii, Association for the Center for Political Consulting Director Sergei Markov, Politika Fund President Vyacheslav Nikonov, Institute for the U.S. and Canada Director Sergei Rogov, Public Opinion Fund President Aleksandr Oslon, presidential advisor on strategic stability and former Defense Minister Igor Sergeev, and Duma deputy speaker and leader of the Liberal Democratic Party of Russia Vladimir Zhirinovskii, according to the pro-Kremlin website strana.ru.

Rogov provided the most specific advice, suggesting that Russia seek serious economic concessions. According to Rogov, Russia now has the opportunity to finally resolve the problem of Soviet-era debt, especially as the U.S. has underwritten the Polish, Israeli, Egyptian, and Pakistani debts, "Nezavisimaya gazeta" reported on 26 October. Rogov also warned that a unilateral withdrawal by the U.S. from the ABM treaty would indicate that "no serious partnership" exists between the U.S. and Russia, and that as before, the U.S. wants to weaken Russia. According to Pavlovskii, Putin should insist that Russia play not a consultative but a decisive role in the new system of collective security. Vyacheslav Nikonov of Political Fund sounded a more pessimistic note, predicting that a serious breakthrough in relations between the U.S. and Russia will not take place. According to Nikonov, it is possible that Putin will again have to answer questions about the "oppression of [Media-MOST head Vladimir] Gusinsky, [Georgian President Eduard] Shevardnadze, and Chechnya."

Back in the U.S., however, at least some experts on Russia appeared more confident that U.S. President George W. Bush will deliver enough "tangible" items that Putin will be able to claim victory back home. According to Michael McFaul of Stanford University, Bush "seems ready to deliver" and "has already called upon the Chechen leadership to cut their ties with Osama bin Laden." According to McFaul, that statement was "a clear victory for Putin." In addition, McFaul believes that Bush "appears ready to slow the process of ABM treaty abrogation" and to recommend that the process of the Jackson-Vanik amendment limiting U.S.-Russian trade be lifted. However, Andrew S. Weiss of the Council on Foreign Relations predicts that the Bush administration "is more likely to deliver rewards that are high in symbolic content, such as the final revocation of Jackson-Vanik, rather than the big-ticket items that some Russians feel they deserve, such as accelerated Russian accession to the WTO, a major write-off of Russia's Paris Club debt, and a watering down of NATO's core mission/capabilities."

Regardless of what Putin brings away from the summit, an informal survey conducted among U.S. experts regarding Putin's domestic policies suggests that he has considerable room for maneuver (see item below). Even if Putin returns to Moscow with less than expected, his critics have few means -- other than holding discussion forums -- to challenge his authority. (Julie A. Corwin)

EXPERTS ROUNDTABLE

ROOM FOR MANEUVER.
This week, "RFE/RL Russian Political Weekly" asked a number of U.S. experts on Russia to comment on the possible impact on domestic policies of President Putin's shift towards the U.S. in foreign policy. Will Putin's shift towards the U.S. in foreign policy require him to make concessions on his domestic policy? The consensus view appears to be that Putin remains in a fairly strong position and more than capable of continuing to shape the country's political and economic agenda.

Steve Solnick, Columbia University: I think that to understand the domestic consequences of Putin's apparent Westward tilt, we need to step back and consider the nature of his domestic support. Is Putin more of a Western leader, basing his legitimacy on electoral support and strong polls? Or is he more of a Soviet-style leader, inheriting an administration staffed by rival factions and appointed by his predecessor, in need of time to truly consolidate his power?

Putin clearly benefited from an electoral honeymoon in the wake of the March 2000 elections, but unlike Yeltsin in 1996 he has capitalized on this triumph to shuffle cadres in a manner that would have made [former Soviet leader Yurii] Andropov proud. He began by neutralizing the press as a weapon available to his rivals, thus leaving them vulnerable to either removal or "divide and conquer" tactics. He removed Gusinsky and Berezovskii from the scene, prompting the other would-be oligarchs to maintain a lower profile. He has fashioned a compliant Duma and a supine Federation Council. Through Federation Council reforms and the federal redistricting plan, he has chased the regional bosses out of Moscow, forcing them to tussle with federal proxies in seven scattered locales. He has been reasserting federal control over the most significant national monopolies, first at Gazprom and now at the rail ministry.

Crucially, Putin has managed to conduct this rolling purge without triggering the emergence of any coherent bloc of opposition. In fact, I think the overarching aim behind Putin's consolidation of power since 2000 has been to preclude the emergence of any new opposition coalition, loyal or otherwise, that would resemble the OVR gambit of 1999.

What does this imply for his most recent foreign policy initiatives? Clearly, Putin's strong support for the West and associated foreign policy and security shifts have not met with unified support from within the policy elite; nor have they resonated especially favorably in public opinion. However, if the preceding analysis is on target, the most disaffected opponents of his recent policies have no splits in his domestic power base to exploit, since Putin's consolidation of power has been effective.

This is where the recent suggestion that Putin may be repeating Gorbachev's mistakes breaks down. Gorbachev's foreign policies helped undermine him because they prompted groups in the military and security apparatus to find common cause with his domestic political opponents, resulting ultimately in the coalition behind the August 1991 coup. Putin, by contrast, is much further away from any tipping point that would bring silently disaffected actors into open opposition against him.

As a consequence, he has a significant cushion of time to demonstrate that his response to 11 September has brought Russia tangible benefits -- in the form of trading status (bilateral and WTO), increased foreign investment (such as the Exxon commitment in Sakhalin), revived influence in the Caucasus and Central Asia (on the coattails, ironically, of American troops), etc. Those tangible benefits are important in the long run, however, and I'm certain they feature prominently on Putin's agenda for the Crawford summit.

Thomas Remington, Emory University: I do not foresee any shift in Putin's policies on the domestic front arising from his foreign policy moves. He has taken advantage of an opportunity to establish a stronger working relationship with the United States, from which he has already won benefits for Russia (in the areas of Russia's interests in the Caucasus, on Russia's membership in the WTO, and on missile defense) and from which more benefits will doubtless accrue in the future. Well before this time, he had already committed himself to a clear liberal direction in domestic economic policy, taking strong stands on highly contentious issues such as pension reform, land ownership, labor relations, business deregulation, and reform of the utilities sector.

At the same time he has taken steps to narrow the range of permissible political competition and discourse and to create something like a paternalistic or neo-corporatist model of state-society relations. At this point I do not see that he must make any concessions to domestic opponents as compensation for his foreign policy stance. There are no organized domestic political forces strong enough to mount serious opposition to his policy program. Putin has been unusually astute in building up political alliances and neutralizing potential opponents, and he has wide room for maneuver.

Andrew S. Weiss, Council on Foreign Relations: I see relatively few direct consequences for Putin's domestic agenda from his embrace of the U.S.-led campaign against the bin Laden network and the Taliban. Putin's principal problems at home are related to keeping up the momentum for his ambitious economic and legal structural reform program in the face of continued opposition from entrenched vested interests. While some of those groups -- e.g., the military and security services, the Moscow elite -- are already grumbling rather loudly about Putin's dramatic (and I would argue, unexpected) response to the U.S. military campaign, they will accrue very little political benefit from their opposition and will have to use other tools to impede Putin's efforts.

And with Putin's phenomenally high approval ratings and the favorable landscape of competing political forces, I think the Kremlin will not need to adopt new tactics to advance its agenda. The determination of that agenda remains tied to a calculation of what is good for Putin's standing and what the economy needs to move forward (without going too far, of course). Any acceleration or adjustment to the economic reform agenda will be driven by the deepening global recession and downward pressure on energy commodity prices.

Michael McFaul, Stanford University: In deciding to make concrete policy changes to reflect his rhetorical support for the American war against terrorism, Putin has acted against the preferences of many important constituencies within Russia. Publicly, direct criticism of Putin has been limited. After all, Putin still enjoys a 70 percent approval rating, making it unwise politically to speak out against him. Equally important, there is no serious opposition leader or political force in Russia today. This lack of an effective opposition means that criticism -- even if it did become public -- would not be threatening to the president. Finally, because most national television networks are now loyal to the president, public criticism of Putin does not travel very widely.

Nonetheless, below the surface, there are subtle signs of discontent with Putin's new support for American military action in Russia's own backyard. The military, first and foremost, cannot be happy about NATO troops in Central Asia. Second, the intelligence services do not welcome the new alliance. Putin's defense minister, Sergei Ivanov, had to reverse his earlier remarks of caution about the American effort and pledged his support for Putin's position. Nonetheless, many analysts in Russia believe that Ivanov could become the focal point of opposition to Putin within the government should the pro-American policy adopted by Putin not yield results, or should the American war effort turn sour.

Third, the military-industrial complex does not welcome the new Western orientation. These companies enjoy contracts with American enemies such as Iran and Syria and hope to develop even further relations with other American enemies in the Middle East such as Iraq.

Fourth, the Communist Party of the Russian Federation and Vladimir Zhirinovskii's Liberal Democratic Party of Russia have spoken openly against Russia's new foreign policy orientation, arguing that Putin's new strategy represents a sell out of Russian national security interests. Fifth, even the pro-Western liberals are divided. Publicly, the Union of Rightist Forces and its chairman, Boris Nemtsov, have endorsed Putin's strategic Western turn. Grigory Yavlinskii and his Yabloko party also have praised the president's foreign policy moves. At the same time, and less publicly, voices within both of these organizations worry that Putin will use the camouflage of the war against terrorism to roll back democratic practices within Russia even further.

Sixth, Russian society is divided. While the majority in polls has expressed solidarity with the American cause, this same society is divided about the wisdom of engaging in another war with Afghanistan.

Does this long list of opponents to Russia's new American tilt mean that Putin will be constrained in pursuing his new own agenda in domestic or foreign policy? Not yet. On the domestic front, liberals still dominate economic policymaking and continue to march forward with genuine structural reforms. Those political forces that oppose these economic reforms simply are not strong enough to demand compromises.

Paul J. Saunders, Nixon Center: At present, President Putin's newly cooperative approach toward the United States is not likely to lead to any significant changes in Russian domestic policy. With a few exceptions, Mr. Putin's domestic agenda has been cautious with respect to both Russian public opinion and sentiment in the State Duma. Thus the Russian president probably will not face heavy pressure to modify his domestic policies, as the opposition to what he has done so far has been limited in scope and impact.

This may change over time, however. If the Kremlin's new orientation toward Washington fails to bring tangible benefits to Russia, President Putin may risk being seen as another Boris Yeltsin; that is, as making foreign policy concessions that allow him to address the U.S. president on a first-name basis but otherwise do little else. If Mr. Putin's leadership and judgment in foreign policy matters are questioned, this concern could "spill over" into Russian domestic politics. The eventual form of what appears to be an emerging deal on missile defense and reductions in nuclear forces will be especially important in this context, as will be the evolution and consequences of the U.S. military presence in Central Asia. Economic issues like debt rescheduling will also draw attention.

Another interesting question is how Russians will react to new domestic measures undertaken by the Kremlin in the wake of 11 September. For example, though many expected the U.S. war on terrorism to facilitate a Russian crackdown in Chechnya, Moscow in fact seems to have moderated its position somewhat, though its sincerity remains to be seen. Taking into account growing public support for a negotiated solution in Chechnya, this will probably help the rest of President Putin's agenda rather than undermining it. Military reform is another interesting case as the Russian leader seems to be trying to exploit the post-11 September environment to introduce changes long resisted by his country's armed forces. If the U.S. war on terrorism goes well, he may be successful; if it goes poorly, the Kremlin may confront new resistance from the generals and broader public discontent at the same time.

POLITICAL INDEX

THE DUMA'S LOBBYING STRUCTURES.
This year the State Duma is reportedly undergoing a "boom" in the formation of interfactional deputies associations (MDOs), and their ranks now number more than 30. Among the best-known and most active MDOs is Energy Russia, which was founded by former Prime Minister Viktor Chernomyrdin, when he was still a Duma deputy, in February 2000. Energy Russia has its own future legislative plans as well as an "expert-analytical council," which prepares conclusions on bills that are being discussed. According to "Nezavisimaya gazeta" on 13 September, there was tension between Energy Russia and the Duma's Energy Committee. However, that problem was more or less resolved when Vladimir Katrenko, a Unity deputy, who happens to be the chair of the Duma's Energy Committee, took over as head of Energy Russia.

It is generally believed that these groups play a kind of unofficial lobbying role -- most often for specific industries and/or for specific regions. But there are also MDOs which advance foreign policies, such as promoting stronger political and economic ties between Russia, Belarus, and Ukraine, while others foster contacts between parliaments in other countries. The aim of one group, Lawyers of Russia, is to raise the level of professionalism in drafting legislation.

These groups have no official legal status, in contrast to factions such as committees or commissions. Their pronouncements have only the force of a recommendation. They are not even mentioned in the "reglament" governing the Duma. However, there is talk about introducing changes in the regulation to give the MDOs the right to initiate parliamentary hearings, according to "Nezavisimaya gazeta."

The following table provides a partial list of the highest-profile groups among the MDOs. The number of deputies is based on news reports and may not represent the most recent membership tally.

DEPUTIES TINKER WITH TAXES, ELECTION RULES...
Last week, deputies devoted most of their attention to tax legislation. Deputies approved in its third and final reading the third part of the Civil Code. The bill establishes inheritance rights for individuals (see "RFE/RL Russian Political Weekly," 15 October 2001). On 31 October deputies approved amendments to Article 20 of the second part of the Tax Code dealing with the sales tax on printed media. The bill specifically abolishes the tax on print media, such as journals, periodicals, textbooks, and scientific publications. According to polit.ru, the Media Union lobbied extensively for the bill, which is intended to ease financial pressures on print media. The following day, deputies approved in the first reading an amendment to a bill that establishes 1 January 2002 as the date for which exemption from a 10 percent value-added tax for print media expires, according to ITAR-TASS. The vote was 255 in favor with 14 against. Deputies also approved amendments to the second part of the Tax Code regulating taxes on the gambling business and lotteries. The bill frees gamblers from having to pay taxes on their winnings but increases the tax on the gambling businesses themselves, according to ITAR-TASS. Deputies approved on 31 October a presidential bill amending the law on guaranteeing citizens' electoral rights and rights to participate in referendums. The vote was 307 in favor with 72 against and two abstentions, according to ITAR-TASS. The bill attempts to reduce the possibilities for incumbents or acting officials to make use of the "administrative resources" at their deposal on behalf a candidate during an election campaign. JAC

...AND STRIP ONE OF THEIR OWN OF SOME IMMUNITY.
But the event in the Duma that attracted the most attention was the decision to strip legislative immunity from criminal prosecution from deputy (Union of Rightist Forces) Vladimir Golovlev. The move was approved on 1 November with some 387 deputies in favor, two against, and zero abstentions. A vote held the previous day had failed with only 213 votes in favor, eight against and one abstention. The second try was successful because prosecutors reportedly agreed to allow Golovlev to retain some immunity. He can be questioned but not arrested and imprisoned. Golovlev is suspected of "financial abuse" while he was head of the State Property Committee for Chelyabinsk Oblast 10 years ago. According to ITAR-TASS, criminal proceedings were first launched in the case back in 1996. The decision by the Prosecutor-General's Office to raise the issue now prompted much speculation about timing. Golovlev himself and publications owned by Boris Berezovskii linked the prosecutors' move with Golovlev's recent decision, together with Sergei Yushenkov, to launch the Liberal Russia Party with Berezovskii's financial backing. Others interpreted the new probe as part of a campaign to split the Union of Rightist Forces (SPS). Yabloko members earlier accused the Kremlin of masterminding a split in their ranks (see "RFE/RL Russian Political Weekly," 20 October 2001). SPS Duma faction leader Boris Nemtsov voted in favor both times of stripping Golovlev's immunity, while one of Golovlev's most vocal defenders was Duma deputy speaker (Unity) Lyubov Sliska. Fellow SPS member Viktor Pokhmelkin called the Prosecutor-General's bid "an ordered-up political provocation aimed at discrediting people who have boldly proclaimed themselves to be in opposition to the ruling regime." Whatever the motivation, the Kremlin appeared to support the move against Golovlev. Duma sources told RFE/RL's Moscow bureau that deputy presidential administration head Vladislav Surkov ordered the pro-Kremlin groups, Unity, People's Deputy, Fatherland-All Russia, and Russian Regions to vote against Golovlev. JAC

Legislation

Name of Law____________Date Approved__________# of Reading

Civil Code, Part III___________1 November____________3rd

Tax Code, Part II____________1 November_____________1st(gambling)

Tax Code, Part II____________1 November_____________1stArticle 164

On guarantees of citizens'_____31 October______________1stelectoral rights

Tax Code, Part II___________31 October_______________2ndArticle 20

COMINGS & GOINGSIN: President Putin signed a decree on 31 October creating a new government agency to combat money laundering and named Deputy Tax Minister Viktor Zubkov as its head. As chair of the new Financial Monitoring Committee, Zubkov's title is changed to deputy finance minister. Zubkov is also a former head of the tax service in what was then Leningrad.

POLITICAL CALENDAR
8 November: Government to hold session to discuss the country's preparation for winter

9 November: Unified Energy Systems board of directors meets in Moscow

12-15 November: President Putin to meet with U.S. President George W. Bush in Crawford, Texas

14 November: Nationwide act of protest to be organized by independent Russian trade unions, according to "Vremya novostei" on 27 September

16-17 November: Civic Forum, a gathering of more than 250 NGOs, to be held in Moscow